Issue 60  March 26th 2024

Following the case of 'Apple v. Everybody'...

Apple seems intent on taking on the entire world to protect the margins on its App Store business. In our last issue, we covered Apple's proposed changes to the EU App Store to meet compliance issued by the European Commission (EC) Digital Markets Act (DMA). What's followed has read comically like a middle-school feud. Grab the popcorn folks, it's gonna get catty:

• January 25: Apple releases changes to the App Store.
• January 26: Spotify shouts "no fair," Epic calls the announcement "hot garbage."
• March 1: Spotify & Epic tattle to the EC.
• March 3: The EC fines Apple $2B. Spotify gloats.
• March 4: Apple shouts "is too fair!" by issuing a press release that bashes Spotify.
• March 15: Spotify says "they're still doing it!" to the EC because of a 9-day delay on their app approval.
• March 18: The EC cracks their knuckles while eyeing Apple.

Meanwhile, Epic works hard to keep a second front against Apple alive in the U.S.:

• February 16: After four years from the initial booting, Apple re-enables Epic's developer account.
• February 26: Epic CEO, Tim Sweeny, posts a mean tweet about Apple.
• March 6: Apple says "oh yeah?" and revokes Epic's developer account.
• March 7: The EC raises an eyebrow.
• March 8: Apple says "fine," gives Epic their account back.. The EC gloats.
• March 13: Epic tattles to a U.S. federal court.
• March 20: Meta, Microsoft, and X (Twitter) join the fray.
• March 21: The DOJ throws the book at Apple claiming the iPhone killed the Amazon and Microsoft phone business, and doesn't allow you to "send my mom certain videos."

If you find this a bit much, you're not alone. But keep in mind, we're talking commissions worth billions of dollars, so it's no wonder these companies are squaring off so publicly. I find an exchange between Eric Seufert and Ben Thompson on a recent Stratechery podcast (paywall) especially salient:

Eric Suefert: "People don’t recognize whenever you see a price in the App Store that was optimized for gross revenue by the app developer. So, you cut that feed, it’s not going to trickle down to the consumer; they’re not going to pay less."

Ben Thompson "100%....There is so much competition on the App Store that prices have long since been driven down to their optimal level and taking the fee. All it does is shift money from Apple’s pocket to Epic’s pocket."

At the end of the day, we'll likely see some resolution in the middle, but the only real change will be the shifting of profit between juggernaut's balance sheets.

How real is AI today? Unity: over half of devs are using it.

The title of this newsletter may be "Mobile Growth," but it's impossible to avoid AI in our industry. You don't need to be an attendee at "AI Woodstock" (yes, it's a real thing) to see the sheer utility available to app developers—both for marketing and content production use cases—is endless. But just how many of your contemporaries are actually using it today?

According to Unity's 2024 Gaming Report, 62% of developers are currently using AI tools, and the majority of those developers have started incorporating generative AI tech into their workflows to work faster and more efficiently.

For Sale: TikTok. Runs good, minor legal issues. Best Offer.

TikTok is facing yet another ban in the U.S. via a congressional bill—having already passed in the House by a wide margin—and is now sitting with the Senate.

The ban would force the Chinese holding company ByteDance to sell or divest TikTok within six months. Apparently, this is catching TikTok by surprise; perhaps this explains their clumsy approach in fighting the bill.

A deal wouldn't be inconsequential. TikTok reportedly earned $16B in the U.S. last year, and grew 40% to gross a staggering $120B in revenue, which puts it just shy of Meta's earnings. Popular sentiment is the bill has legs, and President Biden has expressed support, so the likely existing blockers are the Senate and the inevitable ensuing legal battles.

A U.S. bill blocking foreign media control isn't without precedent. As Joost van Dreunen points out, the FCC has long prohibited foreign entities from owning over 20% of a broadcasting entity. I may have missed that Communications Act—given it was enacted into law almost 100 years ago—but it's not surprising to see why the U.S. government is taking such a proactive approach. 2024 is a presidential election year, and it was hard to miss concerns over media bias in the last two elections.

Timing on the decision? While TikTok might be forced to sell within 180 days of the bill passing, it doesn't sound like the Senate feels the same urgency: "We don't do things fast. We're designed not to do things fast, so I would think months." Sen. Kevin Cramer, R. ND.